When an unexpected expense comes up and your savings aren't enough, you may start comparing loans for bad credit and other short-term borrowing options.
Two terms you may encounter are title loan and payday loan.
Although both can be used for short-term financial needs, they work very differently. A title loan is secured by a qualifying vehicle title, while a payday loan is generally an unsecured, smaller-dollar loan that is due within a short period.
Understanding the title loan vs. payday loan differences can help you compare the amount available, requirements, repayment structure, collateral, and potential costs before deciding whether either option fits your situation.
It's also important to understand that Missouri Title Loans, Inc. currently offers title loans and signature installment loans—not payday loans. Payday loans discussed in this guide refer to loans available through other appropriately licensed Missouri lenders.
Key Takeaways
- Missouri payday loans are generally unsecured loans of $500 or less with terms of 14 to 31 days under current Missouri law.
- Missouri Title Loans, Inc. offers qualified borrowers title loans up to $15,000*, subject to vehicle evaluation and approval.
- A title loan requires a lien-free vehicle title and uses the vehicle title as collateral.
- A payday loan generally does not require vehicle collateral.
- Missouri Title Loans, Inc. currently requires a state-issued ID, lien-free vehicle title, and the vehicle for inspection for a title loan.
- Missouri Title Loans, Inc. welcomes different credit types to apply for title loans, but approval isn't guaranteed.
- Payday loans can carry substantial costs, so borrowers should review fees and repayment requirements carefully.
- Missouri Title Loans, Inc. currently offers title loans and signature installment loans rather than payday loans.
Title Loans Vs Payday Loans For Bad Credit
Loans for bad credit can help those suffering during a financial crisis. Your credit situation may be out of your hands, as you may have lost your job unexpectedly and failed to make debt payments. You shouldn’t have to suffer because something happened outside of your control that tanked your credit score.
Thankfully, you can get help with two loans for bad credit: title loans and payday loans.
Learn more about these two loans below:
1. Payday Loans
Payday loans are short-term loans designed to help you out during minor financial emergencies by allowing you to borrow money from a future paycheck. Depending on the lender, you won't be able to borrow huge sums of money. Instead, you can pick from smaller loan amounts (think between $100 and $500) to tide you over until your next paycheck.
Unlike traditional installment loans, you will often repay payday loans in full on your next payday (hence their name). Ensuring you only borrow what you can afford to fully repay in one go is essential to using such loans responsibly.
The following are the requirements you will need to meet to borrow a payday loan:
- Identification — Lenders will accept all kinds of primary identification, including a driver's license, passport, military servicemember's ID card, and student ID card. Keep in mind that whatever identification you choose to use, it must contain your photograph, full legal name, and date of birth. You need to be at least 18 years old to access payday loans.
- Income verification — Typically in the form of your most recent pay slip, lenders use your income to establish how much they can offer you. More often than not, this will come from your employment. However, some lenders are willing to accept other types of income, such as government benefits and inheritance. Call ahead to check if the lender allows these types of income.
- Active money account — Lenders will expect you to have an active bank, prepaid card, or credit union account to receive the loan amount.
- Missouri residency — To request a payday loan in Missouri, you must be a resident of Missouri.
2. Title Loans
While both title loans and payday loans are short-term and designed for emergencies, the former's requirements and specifics are very different from the latter's. Title loans give you the opportunity to borrow as much as $15,000 with bad credit by using the value of your vehicle (car, van, or truck). The more it is worth, the more we can lend you.
Due to the high lending limits, our instant title loans online ensure you can fund emergencies like medical bills, veterinary fees, and home repairs with relative ease, even if you don't have the best credit history. Provided you own a vehicle outright, you can get a title loan from us at Missouri Title Loans, Inc.!
To get a title loan from us, you will need the following required items:
- Identification — We accept passports, driver's licenses, military servicemembers' ID cards, and other primary forms of identification. Whatever you choose must display your full legal name, date of birth, and photograph.
- Vehicle — We use your vehicle to establish how much you can borrow. The more it's worth, the more you can borrow. Owning a luxury vehicle in great condition with a complete service history, low mileage, and no modifications will likely see you gain approval for the maximum loan amount. However, an old run-of-the-mill vehicle in poor condition with high mileage, no service history, and modifications is unlikely to qualify for a high loan amount.
- Lien-free vehicle title — You must have a lien-free vehicle title in your name to qualify for title loans. This title proves you own the vehicle outright without any outstanding liens or judgments against it. We put a lien on your title to secure the loan, and we can't do that if there is already one in place.
What Are The Differences Between Payday Loans And Title Loans?
While both loans allow you to borrow money with bad credit, many other details are different. These differences can help you determine the best loan for your financial situation. You may not meet the requirements for one but do for the other. One may not offer the money you need, but the others do. Consider the differences between these bad credit loans before choosing one.
The following are the differences between payday loans and title loans for bad credit:
- Loan amounts — The main difference between these loans is how much you can borrow. Payday loans can provide up to $500 for smaller emergencies, but title loans are better for larger emergencies because you can borrow up to $15,000.
- Collateral — Instant title loans online require you to use your lien-free car title as collateral to secure the loan. Payday loans are unsecured loans that do not require any collateral.
- Income requirements — Payday loans require borrowers to prove their income, as you will need proof to borrow from a future paycheck. However, title loans will accept nontraditional income, such as disability benefits, unemployment, Social Security, etc.
How Can You Get Loans For Bad Credit In Missouri?
The approval process for payday loans and title loans is similar. Both should allow you to get approved the same day and borrow money fast for financial emergencies. At Missouri Title Loans, Inc., we allow borrowers seeking instant title loans online to start the process from home and get approved in person in less than 30 minutes.
The following are the steps involved in getting loans for bad credit:
- Fill out our online form with your necessary information
- Answer a phone call from a loan associate to learn about requirements, loan amounts, and the approval process
- Gather your required items and bring them to the closest Missouri store location
- Have your requirements verified in person
- If you are getting a title loan, allow a loan representative to inspect your vehicle for its value
- If approved, sign the loan documents to complete the process
- Receive your emergency funds the same day or the next business day
Borrow Title Loans For Bad Credit – Receive Up To $15,000 Today!
Do you have bad credit but need emergency cash today? Missouri Title Loans, Inc. can help with our instant title loans online. You can start the process and get approved the same day. Our easy online contact form makes starting the process easy, and you can get approved in person in less than 30 minutes.
If you need fast financial relief, get help from Missouri Title Loans, Inc. Apply for our title loans for bad credit with our online inquiry form or call us directly to learn about the approval process.
Frequently Asked Questions About Title Loans vs. Payday Loans
What is the difference between a title loan and a payday loan?
A title loan is secured by a lien-free vehicle title, while a payday loan is generally unsecured. Missouri payday loans are generally $500 or less and have terms of 14 to 31 days. Missouri Title Loans, Inc. offers title loans up to $15,000*, subject to vehicle evaluation and approval.
How much can I get with a Missouri title loan?
Qualified borrowers may receive up to $15,000*. Actual amounts depend on vehicle evaluation and approval of the complete application.
Do title loans require collateral?
Yes. A title loan uses a lien-free vehicle title as collateral. Missouri Title Loans, Inc. also requires the vehicle itself for inspection.
Can I get a title loan with bad credit?
Missouri Title Loans, Inc. welcomes all credit types to apply. However, approval isn't guaranteed, all applicable eligibility requirements must be met, and a credit inquiry may apply in some circumstances.
Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.
